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ARI’s Executive Director Takes on Thomas Piketty

In an online interview at City A.M., ARI executive director Yaron Brook commented on French economist Thomas Piketty’s Capital in the Twenty-First Century, the surprise international bestseller that laments economic inequality.

Brook disputed Piketty’s view that “inequality is bad,” explaining that there’s “nothing morally wrong with inequality; on the contrary, if the inequality is a product of freedom, inequality in and of itself is an act of justice.” (Throughout this post, I’ve supplied some punctuation to clarify the rough transcript, which represents only part of a longer spoken-word interview). Said Brook:

It is fair that Bill Gates makes more money than I do. He created more value for more people than I ever will. His customers paid him for his work and the values he created. He didn’t steal their money. They gained value from his products. Every single person who bought a Microsoft product, their life was better for it. So yes, Bill Gates got several billion dollars, but he probably increased the wealth of individuals and society by several trillion dollars. He touched the lives of every human being on the planet.

Now that’s true of Bill Gates, but the same is true of every wealth creator. Putting aside cronyism and assuming we have a free market, even the wealth of hedge fund managers is justified. He is creating value, he’s allocating capital, and the allocation of capital is one the most difficult and the most productive roles in the economy.

The interview also touches on Ayn Rand’s philosophy and its relevance to the Piketty controversy and cronyism. “What Ayn Rand’s project in politics is, is to take the gun away from the politician and to allow the politician to only use the gun protecting the rights of citizens,” said Brook. “These rights are freedom of action without hurting others. Without the ability to control business, cronyism disappears.”

Read the whole thing here.